1. How does Citibank differentiate its e-business product offering from that of its competitors? How could Citibank create its own competitive advantages in the market place?

Citibank differentiated itself from competitors by using their customer service effectively. They offered several services to their clients. Citibank offered telephone hotlines, customer relations managers to give individual attention to their customers, and service experts. Citibank also continued their investment in technology for the front and back end of the banking systems. Citibank committed to an “e-business strategy-Connect, Transform and Extend-was to web enable its core services, develop integrated solutions and reach new markets.” (McCauley & Khan, 2002, p.1).

Citibank was also committed to its customers. According to the case study, ‘Citibank’s vision was to become the world’s leading e-business enabler". Citibank had over 268,000 employees located in over 100 countries and their focus was to embed their services into the everyday lives of the local population. “A bank that had roots in the country as deep as any local indigenous bank, building a broad customer base, offering diverse products, actively participating in the community and recruiting staff and senior management from the local population”.

In addition to being committed to employees and customers around the world, Citibank has strong brand recognition and continues to invest in technology. To position itself strongly within the technology sector, Citibank formed “alliances with Oracle, Commerce One, Inc., SAP AG, Wisdom Technologies and Bolero.net” to help transform its company to an e-business model.

In 2000, four companies teamed with Citibank to form FinancialSettlement Matrix.com – a company that connected buyers and sellers in e-marketplaces with payment processing, credit and other services through multiple participating banks and financial service companies”.

Citibank's strategic intent is to convert its traditional money management business into an e-business framework. How does Citibank transform its traditional assets into digital assets? What issues, if any, do you envision that Citibank must overcome in order for the implementation to be successful?

In order for Citibank to transform its traditional assets into digital assets, it must first establish the departments necessary to manage this process. In March 2000, Citibank formed the Internet Operation Group which was in charge of distributing Internet activities among e-Citi and all other business units. Shortly after that, in April 2000, Citibank formed the e-Consumer and e-Business segments, designed to “infuse the Internet into all customer and corporate banking activities”. Following that in May 2000, Citibank added e-Capital Markets and e-Assets Management.

Under Jorge Bermudez’s guidance, the e-Business unit was tasked with developing the software needed to set clients up with electronic business accounts, utilizing both business and IT people. Lessons were learned from prior failures, when Citibank tried to manage all aspects of e-business themselves, and in the years following, Citibank learned to focus on their partners’ strengths and work with these partnerships rather than go it alone.

The e-workplace was a tremendous boost to Citibank when transitioning from the traditional way of doing business to the electronic way.  The e-Business model involves constant attention to development in order to keep making upgrades. The business model on the Internet is not a system that can be managed lightly. Consumer demands involve constant attention to development needs that revolve around consumer deliverables.

Is there any growth potential for this business? What opportunities and threats does Citibank face?

Potential growths in e-business are always existent and continued developments are always necessary. More and more companies are choosing to do everything from banking to purchasing to advertising online. Citibank must continue to align themselves with the right partners in order to maintain their standings in the e-business sector. Company executive Tom Edgerton stated, “In the future, it won’t be what your company can do, but what the network of companies you work with can provide”. In order for Citi to continue to grow, it must evolve in its e-Business model and develop constant updates to its online products.
Opportunities:

Fundamental opportunities for Citibank would be to expand on their existing good reputation, exceptional customer service, and enhanced web features. According to Edgerton, “Citibank brings considerable value to potential alliance partners. They’re interested in our brand, our financial services expertise, our global presence, our strong customer relationships and position as a trusted provider, as well as our knowledge of specific industries and international markets”.

The regionalization and specialized processing centers that Citibank has developed has provided them with “scale and continual improvement opportunities”.
Threats:

Citi faced many strategic challenges. As discussed in the case study, “Citibank’s challenge was how to manage the vendors and suppliers and ensure that they understand Citibank’s strategy and would not exploit the Bank’s strengths of the information base”.

As Chemdex realized, “even as the company managed to secure millions of dollars in venture capital to build a thriving network of suppliers and users, all connected through digitized transactions, success was still elusive. The problem was that Chemdex lacked an essential ingredient for network success: strong relationships with its trading partners”

How could Citibank's Cash and Trade Group develop different e-business products for different industries? How can Citibank identify what it needs to offer when the market is changing so rapidly?

Citibank’s objective was to manage the flow of money for its corporate customers through the use of the World Wide Web. The key was to deliver an integrated solution that would “enable its corporate customers to conduct transaction on-line” with distinct needs.  Citigroup wanted to be the middle intermediary between buyers and sellers for any type of transaction.

Their presence in the industry emphasized on customer service, including “response time, technology and support”.  This allowed confidence for customers to use Citigroup’s products. And with growing pressure to transform to online products, Citi’s competitive advantage expanded to creating products for different industries online.

            Citigroup was dedicated to creating products that catered to different industries and business needs by taking appropriate action, whether it was to start e-business groups or invest millions of dollars in online technology. By 2000, business clients demanded an online product that would streamline and improve “traditional payment processes”.  The case study provided a few examples of what customers demanded. They wanted electronic invoicing, automatic application of payments to account receivables, online payments guarantees and digital receipts stored online.  Other requirements included multi-currency payment management and payment by invoice and currency. 

Citigroup’s goal of becoming the world’s leading e-business enabler required a fresh approach that allowed the company to cater to multiple industries and the growing need of changing the product specification. The company created several online business groups dedicated to each area of the business. By April 2000, newly formed e-Citi group created e-Consumer and e-Business to target all consumer and corporate banking activities. Other industry needs complemented e-Citi including e-Capital Markets and e-Asset Management. These groups were able to identify needs of each respective market as demand changed rapidly. To combat the changing world of technology, Citi partnered with key technology players in the industry including Oracle, Commerce One Inc., SAP AG, Wisdom Technologies and Bolero.net to dedicate to their online products. This change in strategy allowed the company to constantly focus on changing technology and specific client needs. “Citibank partnered with companies that had complementary technology or infrastructure or access to markets”. 

The mission was to connect customers with their online products to conduct “full transactions…anywhere around the world”.  The e-Citi group developed programs that promoted to different industries and clients, with aim to allow the transition from “old-style processing…to focus on transforming workflow automation”.   Citi continues to “deploy various initiatives” to continue to service customer needs based on industry requirements.  In addition, the opportunity exists for Citi to “deliver e-products at scale more quickly and more efficiently to customers”.  Due to their massive customer reach, Citi can also help make improvements with products in one region or industry and “seamlessly deployed world-wide”.  The flexibility with their product development allows the company to create different e-business products for different industries and offer requirements for changing markets.

As the case study eludes, Citi’s online products allow customers of different industries to connect to Citibank around the world. The addition of using technology partners allows the company to continue building “new global infrastructure to deliver products and services online”.  Finally the new technological advances by Citi have helped the company integrate new products together in many ways that was not possible before 2000. These additions have helped the company to cater to different markets and in different industries, in the meaning be able to respond to the rapid changes of all industries.